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Backlash — by Lee Pitts

Prior to the National Cattlemen´s Beef Association summer conference in Reno, they put out a press release announcing a new wrinkle. According to the release the NCBA officers would host an open microphone forum in Reno and be available to respond to member´s questions and receive input on issues. In other words, they decided to let their members voice their own opinions at a meeting. What´s newsworthy is the organization had to put out a press release to let people know they´d have a chance to express their opinions at an NCBA meeting. Lest you think the NCBA has seen the light they also announced that the gripe session would be followed by a panel discussion between NCBA council leaders and representatives from McDonald´s, the Chicago Mercantile Exchange and Farmland National Beef.

Now that´s more like the NCBA we´ve all come to know.

The NCBA also announced recently that they will be holding a series of town hall meetings "to listen to and understand your needs. We also want you to call or write us if you have a concern," said the release. "We will respond. This is your organization and we intend to represent you and implement the policy you have developed."

What´s going on here? Is this the same NCBA who refused to let members vote by proxy on the merger in 1996 that created the NCBA? Is this the same organization that fought a referendum on the checkoff that would have given those who pay a say? Is this the group critics are calling the Non-Cattlemen´s Beef Association?

Don´t get your hopes up that this cat has changed its spots. Unfortunately the NCBA´s new-found willingness to listen doesn´t mean they´re going to forsake packers and processors for independent feedlots and ranchers. They just need your money.

A Day Late and A Few Dollars Short

In another surprisingly frank admission by Jon Ferguson, NCBA´s treasurer, he admitted they´re in a financial bind. Many in the old NCA thought that easier access to checkoff dollars would be their salvation. How ironic it may yet lead to their demise.

The NCBA is facing troubled times because of a backlash from the merger and because of their recent positions on important issues. As a result the NCBA has lost 19 percent of its members in just the past two years. From June of 2001 to June of this year the NCBA lost 10 percent of its members, going from 32,470 members to 29,428. Their membership ranks still includes untold thousands of members who are forced to join NCBA through their state associations and also some passive cattle feeders who have NCBA dues tacked on to their first feed bill. The decline in dues money created a deficit of $676,000 for the first nine months of NCBA´s fiscal year. At this point they are anticipate losing three-quarters of a million dollars this year alone. NCBA has spent $250,00 on the checkoff battle so far and expects to spend another $70-80,000.

According to their treasurer, Jon Ferguson, a non-nonsense businessman by all accounts, NCBA dues, sponsorship, advertising and affiliate revenues have all gone down causing the organization "financial stress." To make up the shortage the NCBA plans to use reserves that were created when the NCA merged with the Meat Board. At the time there was two million dollars in the kitty and that grew by nearly a million dollars when the NCBA sold its Denver headquarters in 2001.

Jon Ferguson said that the NCBA must diversify its revenue base and can no longer depend on the pharmaceutical industry for revenue. They plan on cutting costs by reducing the frequency of their two publications and by reducing travel expenses.

Sticks And Stones

One reason for NCBA´s sudden interest in the cow-calf man is that for the first time the NCBA has serious competition for the title of being the voice of the rancher. When NCBA looks around they surely must see R-CALF gaining on them. If you´ve been to any meetings where R-CALF and NCBA representatives debate the issues you know the NCBA reps are getting lambasted. It almost makes you feel sorry for NCBA officers who must stand up and defend their positions. I said "almost."

On top of the bad financial news there has recently been a full frontal assault on the NCBA from a variety of sources. In an article that must have made NCBA supporters wince, David Kruse wrote in his CommStock Report that "NCBA has become the cattlemen´s enemy. A 19 percent drop in membership is serious but NCBA leadership has the opinion they are right, the membership is wrong, and the rebellion will play out," said Kruse. "The NCBA is planning 14 town hall meetings as part of its new "reach out to fool the members" campaign. It took a major crisis of membership and finance to motivate them to leave Denver to host town meetings. CEO Terry Stokes says he´ll put a stethoscope to membership. He´s a quack. A real doctor doesn´t wait until after the patient is half dead and in crisis before he listens to him."

Kruse continued: "I believe the NCBA has become one of rancher´s and independent cattlemen´s greatest enemies. In my opinion, membership with the idea of change from inside is unrealistic. The only way to register an impact is to resign, which droves of cattlemen are doing, hitting the NCBA in the pocketbook. State cattlemen association members have a choice whether to belong to the NCBA. I believe they should have a real choice of which organization they should be affiliated with, including R-CALF, whose membership has been surging."

The town hall meetings and new-found interest in your problems are also a direct result of recent criticism by long time NCA members getting frustrated enough to quit their old organization. And those members are not going away quietly. Count John Stiefvater of Salem, S.D. as another defection. "I served on the NCA board of directors and on the S.D. Beef Council six years: three years on the National Livestock and Meat board; two years as president of S.D. Cattlemen´s and eight years as an officer of SDCA," said Stiefvater. "What you are reading is not the ranting of a cattle feeder that never participated. I´m just tired of seeing our national organization leading us down the road into the fold of the packer-retailer domination. They no longer represent my point of view, so I will no longer be a dues-paying member."

It´s one thing to have a member call you names but when Iowa Senator Chuck Grassley starts calling you a "lackey for the packers" you know your tarnished image is in need of some serious polishing.

Drowning In A Think Tank

If you think the NCBA is turning over a new leaf their actions speak otherwise. According to Kruse, "81 percent of NCBA membership reporting in a recent survey said that the Association doesn´t represent their interests. That´s eight out of ten, yet NCBA has not one intention of changing anything substantive. They are the most arrogant, we´re right-you´re wrong, bunch of hat-over-their-ears cowboys ever to ride sidesaddle over a national commodity organization," said Kruse. "The cattle industry is not losing money. The U.S. consumer is paying plenty for beef. The problem is not the consumer, it´s not beef demand. The problem is the distribution of beef dollars."

NCBA President-elect Eric Davis says things will work out and that "NCBA strives to be a catalyst for positive change. We believe in free market forces," says Davis, "but they can be a little slow in getting profits back in producers´ pockets, and it is NCBA´s objective to help improve this situation." That´s a common NCBA theme. They repeatedly say they don´t want our government interfering with free market forces, yet what was one of their first reactions to the current price crises? They called upon the House and Senate Agriculture and Appropriations Committees "to find funding for research that would get to the bottom of volatile markets and low prices for cattle producers." In a June letter to the committees, Wythe Willey, current NCBA President, asked that funding be provided to USDA to "contract with an unbiased independent consortium of several preeminent business schools to conduct a thorough analysis of the entire livestock, poultry and meat protein complex."

If all this sounds familiar that´s because it is. When things get uncomfortable the NCBA relies on college professors to back their hand. But it´s getting a little old.

While the NCBA wants to pay some packer´s professors to tell us what is wrong with the industry, 28 different local, state, regional and national cattlemen and industry organizations called on Congress to convene hearings into the anomalies of the current cattle market. The NCBA wasn´t one of those groups.

And they Wonder Why they´re Losing Members?

The NCBA also formed a Price Discovery Think Tank to develop "new pricing models, improving price reporting from packers and retailers, and to work with Chicago Mercantile Exchange to provide appropriate risk management tools." The NCBA says "these are complex, difficult issues that will not be solved by a snap of the fingers or a quick legislative "fix" that could haunt the industry for years."

One of the ways the NCBA is going to fix things is to "inform producers of marketing options available to them and how they can participate. While it is not NCBA´s role to advocate one market option over another," they say "producers should be aware of options that may fit specific needs." Will they never learn? The whole fight with the LMA over the checkoff started because the NCBA was urging ranchers to bypass auctions and strike up some sort of strategic alliance with a packer.

The NCBA´s proposed solutions are laughable. NCBA President Wythe Willey says, "NCBA looks forward to engaging the intellectual capacity of government and the industry in investigating solutions to the marketplace problems." You know we are in trouble when the NCBA wants to "engage the intellectual capacity of government."

In a press release the NCBA said it was also "continuing aggressive work towards developing a more acceptable definition of captive supply." Cattlemen are currently receiving the same prices they were twenty years ago for their calves, feeders are bleeding red ink and the NCBA´s answer is to come up with a better definition of "captive supply." Memo to the NCBA: We already know what it is. What we´d really like is for you to do is do something about it!

Keeping The Government At Arm´s Length?

If the NCBA is wondering why they´re losing members they only have to look at their recent policy positions. They were adamantly against mandatory country of origin labeling, preferring instead a voluntary country-of-origin labeling program. Do they think we´re stupid? Voluntary country of origin labeling is what we already have. Do you see packers rushing to put "Made in the USA" stickers on their beef now?

The NCBA bragged they were "successful in getting Trade Promotion Authority for the President which gives him authority to negotiate a strong trade policy." In other words . . . the NCBA wants our President to create more NAFTA-like agreements.

The NCBA also joined forces with The Nature Conservancy in creating the Grassland Reserve Program in the new farm bill. The GRP is a project the two groups have been working on together for about two years. The farm bill authorizes up to 2 million acres to be enrolled in the program, at a cost of up to $254 million. Doesn´t it sound like the NCBA is trying to keep the government at bay? And hopping in bed with the Nature Conservancy no less!

The NCBA says they don´t want government involvement in our business while at the same time in a court of law they were telling a Judge that the beef checkoff is, and always has been, a government program. And speaking of the checkoff, the NCBA still contends that two thirds of ranchers approve of the current beef checkoff. While in California ranchers recently voted 65 percent to 35 percent NOT to increase their state checkoff by fifty cents. The NCBA says they expect to win the legal battle over the checkoff. When asked about a contingency plan if they lose, Beef Board CEO Monte Reese said, "Our plan is to prevail." Proving that the NCBA may still be in a state of denial.

Perhaps the NCBA is counting on the USDA to somehow bail them out of their cash crunch. And perhaps that is why they didn´t pursue monetary damages for cattlemen who lost millions after the USDA´s mandatory price reporting fiasco.

The NCBA was right when they said there are two camps with "competing visions for the industry." According to David Kruse, "The current beef industry represents their vision. It is their model. It represents the industry structure that they want. How do you like it?" Judging by their membership roles, evidently not too well.

The NCBA says that a philosophical divide has grown between producers because of hard times. "It is localization versus globalization," they say. "NCBA has become a pawn in the political games. We call on all industry organizations to work together to increase profitability and viability for all beef producers. We will lead the way."

But as cattleman and longtime NCA and NCBA member Tom Spencer wrote, "At one time you were asked to lead the industry; later you were asked to follow since you couldn´t manage to lead. Today I´m telling you to get the hell out of our way."

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